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From paper to wood pellets

By Tony Kryzanowski

A new $19 million wood pellet mill capable of producing 130,000 tons per year has opened for business on the site of a mothballed paper mill in Portage-du-Fort, Quebec, just across the Ottawa River from Renfrew, Ontario, and with it has come the return of 50 direct jobs to this economically challenged region.

The new Trebio wood pellet plant—shown under construction—sits on the site of a mothballed paper mill in Portage-du-Fort, Quebec, just across the Ottawa River from Renfrew, Ontario.

Trebio Inc., a pellet manufacturer majority-owned by Netherlands-based GF Energy, with minor ownership positions held by managers in Canada and Britain, expected to achieve 90 per cent of its production capability by the end of 2011. It also has the capability to expand to 250,000 tons per year, should market conditions dictate. GF Energy is experienced in wood pellet brokerage and trading, and the Trebio production facility is the company’s first investment in North America.

This is not a business managed by rookies. Company CEO Louis Campeau is a professional forester with considerable experience managing his own forestry operations and sawmills with Quebec-based Davidson Industries, which produced primarily pine lumber products. He sold his forestry interests to Tembec in 2001. Campeau has also invited individuals he worked with previously to work with him at Trebio, including his former partner at Davidson Industries, Marcel Belair, and Trebio production vice-president, Yann Sellin.

Campeau believes this is a good time to invest in pellet production because it is being driven by growing market demand.

“People in Eastern Canada have been afraid to install pellet stoves or pellet heating devices because they didn’t know where to find pellets,” he says. “Some of them even ran into a problem in 2008 when there weren’t any pellets available. I think it’s always good to be among the first to get into a new market like this because you can influence to some degree the way that the market develops.”

Wal-Mart has recently become a Trebio customer, stocking the company’s wood pellet products at its Cornwall, Ontario location.

Trebio Inc., a pellet manufacturer majority-owned by Netherlands-based GF Energy, with minor ownership positions held by managers in Canada and Britain, expected to achieve 90 per cent of its production capability by the end of 2011. There is an established demand there for wood pellets and Campeau says it represents a bit of a ‘safety net’ for the company, although he acknowledges that the company still has some work to do to further develop that market. So far, Trebio has shipped two complete shiploads of wood pellets to Europe. It has established a sales office for Britain and Ireland.

A meeting with Peter Bonsall in 2008, also a former employee of Davidson Industries and who is now Britain and Ireland sales manager for Trebio, showed Campeau that there were opportunities to sell wood pellets in Europe, especially since Bonsall was in Canada at the time looking to purchase wood pellets for export. Campeau also knew that there was considerable residual and low grade wood fibre available from both public and private lands throughout the Pontiac area of Quebec as well as on the Ontario side of the Ottawa River to support a pellet operation.

“We realized that the first requirement for a successful operation was to have the raw material,” says Campeau. “With the disappearance of the pulp and paper industry, there is a lot of supply, especially in the low grade type of wood, but almost no demand. I found the wood and then I went looking for a strategic partner because I didn’t know anything about pellets at the time.”

So he began making inquiries to put all the pieces in place, which included a meeting with GF Energy through a friend, to bring them on board. The Quebec government has also granted Trebio guaranteed access to a portion of its required fibre supply for 25 years from logging activities taking place within the vicinity of the pellet plant by other forest companies. A certain percentage of the wood they harvest is non-merchantable fibre best suited for something like wood pellet production.

“Everyone has the obligation to work with everybody else,” says Campeau. “So this way, nothing goes to waste.” He adds that having that guaranteed supply makes it a lot easier to finance a project like this because lenders know that the wood supply isn’t going to disappear tomorrow.

Trebio has also negotiated softwood and hardwood chip, sawdust and bark supply contracts with regional sawmills within a 100 kilometre radius, as well as fibre supply contracts with private landowners on the Quebec and Ontario sides of the Ottawa River, many of whom are located right beside the plant.

The wood material is purchased green and delivered to the pellet mill where it is dried for consistency.

Both the federal and Quebec governments have eagerly supported the revitalization of the former Smurfit-Stone paper mill that closed in November 2008, which left about 500 area residents unemployed. This caused the region’s unemployment rate to skyrocket to more than 20 per cent. A company called Green Investment Group Inc (GIGI), based in Alton, Illinois, arrived as a white knight to revitalize the 890 hectare site into a regional industrial park, and Trebio now occupies two of the existing paper mill buildings. The Quebec government has contributed $9 million toward the pellet plant, and the federal government has provided a $4 million loan.

The old paper mill site has excellent infrastructure with rail lines leading right into the buildings. Trebio has also rented a storage facility at Trois-Rivieres, a port on the St. Lawrence Seaway, capable of holding 10,000 tons for wood pellets at a time, to load ocean going vessels with wood pellets destined primarily for Europe.

The Quebec government has granted Trebio guaranteed access to a portion of its required fibre supply for 25 years from logging activities taking place within the vicinity of the pellet plant by other forest companies.

The company has shipped wood pellets to Europe in both bags and bulk. It is also aiming to market its products in Canada and the United States, with its sights set on the residential, commercial, industrial and institutional markets in all three regions.

A recent major achievement for the company was attaining the ENPlusA1 standard for its wood pellets—it’s apparently the first wood pellet mill in Canada and outside of Europe to achieve this standard. It was established by the European Pellet Council and assures a certain performance and quality standard in terms of such factors as calorific value, ash content, and moisture content for ENPlusA1 certified wood pellets. Campeau says achieving this standard will open many doors for Trebio specifically in Europe.

“Achieving this standard was very important because there is very little consistency among producers,” says Campeau. “Everyone is kind of using their own quality standard, but in the last two years, there has been a real effort in terms of coming up with one set specification for pellets. It has been done in Europe with the ENPlusA1, which is replacing all of the previous existing certifications.” The United States is investigating adoption of the same standard, which could result in a global quality standard for wood pellets.

Trebio has also achieved Sustainable Forestry Initiative (SFI) certification in its forest management operations.

The pellet mill has five Comact Promill wood pelletizers, which is a French pelletizer product line represented by Comact. This is their first installation in North America. Trebio in fact contracted Comact to supply and install all of the pellet mill equipment on a turnkey basis. Construction began in September 2010 and the pellet mill was commissioned in July 2011.

When the material arrives at the pellet mill, the bark is processed through a BioSizer provided by Brunette Industries and used as hog fuel in a furnace that supplies the heat to the pellet mill’s dryer. The remaining material first encounters a Schutte Buffalo green material hammermill. The material is then dried in a Thompson Dehydrating Company (TDC) dryer, and processed once again through a second Schutte Buffalo hammermill. At this point it is manufactured into pellets through one of the five Comact Promill pelletizers. The plant air emissions system was supplied by Rodair. A company called Premier Tech Systems supplied the bagging line and Trebio uses a Cat 930 front end loader to move material in the plant.

The hardwood and softwood material that arrives at the plant is mixed according to specific recipes to obtain the quality standard required by the company and to maintain its ENPlusA1 standard. There are a wide variety of hardwood species in this particular area of Canada, including species such as red oak, maple, and poplar. The main softwood species are red pine and white pine.

Campeau is encouraged by Ontario’s Green Energy and Green Economy Act that aims to phase out coal-fired power generation by 2014, but he says it is hard to know what role wood pellets might play to fill the void vacated by coal in power generation. There is considerable discussion now about displacing the coal with natural gas. However, the move away from coal fired-power is a positive trend for the wood pellet industry, nonetheless.

“If they did something like that in Ontario, that would be good for the whole pellet industry in Canada. But it’s a few years’ away and we aren’t banking on that,” says Campeau.

The short term plan for the company is very straightforward: to manufacture pellets to a high standard, sell product at a good price and to operate profitably. Longer term, the goal is to expand production as dictated by the market.

A new $19 million wood pellet facility has opened at the site of a former Smurfit-Stone paper mill in Quebec, and supported by achieving the ENPlusA1 standard for its wood pellets, Trebio Inc. is looking to serve European, and domestic, markets.